In the eastern Mediterranean this summer, there is a great deal of talk about the possibility of making gas discoveries in the submerged areas and the potential impacts of such discoveries, and also regarding the possible disputes and conflicts that might ensue, particularly with Israel. The subject of gas reserves in this region is not a new one. In truth, this has been discussed extensively in the past, while several local and international companies promoted optimistic, albeit limited, data, in order to raise their shares' value in stock exchanges. However, the renewed focus on this issue is taking on a more serious dimension, and hence, it must be given its due importance. Why this optimism now then? In fact, it can be attributed to the huge gas discoveries in Egyptian waters, particularly north of Alexandria and in the Nile Delta region, in addition to the interest shown by some international companies operating in Egyptian waters in drilling in the surrounding maritime areas. This is in addition to the interest shown by neighboring countries in intensifying exploration and drilling operations in their own territorial waters, in light of the encouraging yields in Egypt. In this regard, the seismic surveys in several countries have arrived at encouraging results. Of particular interest with what regards the Egyptian discoveries in the Mediterranean is the draft law submitted by the Ministry of Petroleum and approved by the Parliament in the mid-eighties, whereby gas discoveries were equated to oil discoveries, in the sense that the former receive the same privileges as those of the latter. Previously, gas discoveries were overlooked due to the lack of sufficient financial incentives for operating companies to look for gas. Next, operations increased in the Mediterranean region, and huge gas fields were discovered. Today, gas is the main source of energy in Egypt, especially after oil production fell. Furthermore, the Mediterranean gas constitutes about 40 percent of the total Egyptian gas production. The Egyptian discoveries are located in purely territorial waters, and are not in proximity to the territorial waters of any other country. Nonetheless, the challenge facing Egypt is exploiting the gas located in deep waters, and finding a successful formula to provide adequate supplies of gas for domestic consumption in the future, in addition to exports. However, the situation is entirely different when it comes to the gas discovered in Palestine near the coast of Gaza, which is beleaguered by Israeli hurdles. British Gas (BG Group) and its partners, the Consolidated Contractors International Company (CCC), and the Investment Fund of the Palestinian Authority, discovered the ‘Marine' gas field in Palestinian waters in 2000. The field is located around 25-30 kilometers off the coast of Gaza, and its confirmed reserves are estimated at one trillion cubic feet. The group's intention was to build a pipeline directly from the field to Gaza. However, the Israeli authorities objected, and insisted that the pipe run through Ashkelon, from whence gas would be supplied to Gaza. In other words, Israel insisted on controlling the quantity of gas supplied to Gaza, and on the knowledge of its financial value. However, the Palestinian Authority and the Group concerned refused these conditions, and to date, production from this field remains at a halt. In 2004, the American group Nobel Energy discovered the Mary B gas field in the Israeli waters adjacent to Palestinian waters, which makes this field a shared one. The production capacity of this field is estimated to be around 600 million cubic feet per day. Gas is currently being produced from this field without regard to its shared nature. Nobel Energy also discovered the Tamar gas field in northern Israeli waters, off Haifa. According to the information available, there are three blocks in the field, the most important of which is located around 35 miles south of the Lebanese waters; it should be mentioned here that the maritime boundaries between the two countries are yet to be demarcated. In addition, there are two small blocks that lie in both Israeli and Lebanese waters; they are shared fields. According to Noble Energy's data, Tamar is a massive field, and its geological composition extends over a wide distance that might be going well into Lebanese and Cypriot waters. In fact, Nobel Energy signed a purchase and sale agreement with the Israeli Electric Corporation to supply it with gas as of 2012. It must be mentioned here that border demarcation is much easier when done before making oil discoveries, compared to afterwards as this becomes a difficult process that may lead to political and military clashes. This is particularly valid in case the two countries concerned are at war, as is the situation with Lebanon and Israel. Be that as it may, there are also positive seismic surveys of the entire Lebanese waters, giving the opportunity for exploration and drilling in areas far from the border. This in addition to – of course – suing the company involved for possible breaches of Lebanese borders, and this may delay the operating company's plans or disrupt them. However, the underlying problem in Lebanon is that of the internal political differences, which are impeding the legislation of a modern law for oil that determines the tax levied on operating companies, in addition to providing the scope of arbitration in the event of disputes. This law is necessary to attract companies to operate in Lebanon. Thus, it is rather unfortunate that the internal political differences have so far succeeded in delaying the legislation of a modern petroleum law, let alone contracting international petroleum companies to start drilling. While this delay made Lebanon lose the initiative, it did not lose its rights with Israel. In fact, the positive momentum that led to optimism in recent weeks stems from three main factors: first, there is the announcement by the U.S. Geological Survey last April on the ‘Levant Basin', which extends across the offshore and onshore regions of Palestine (including the West Bank), Israel, Lebanon, and Syria, in addition to Cypriot waters. According to the U.S department, which surveyed the eastern basin of the Mediterranean for the first time, and which also relied in its study on Israeli and old Soviet studies, the basin holds 227 trillion cubic feet of gas reserves, and 7.1 billion barrels of petroleum liquids. Second, there is the announcement by Nobel Energy of the findings of a seismic survey conducted by the specialized Norwegian company Petroleum Geo-Services in 2009, regarding the Leviathan Field, which is located around 130 kilometers off the Israeli coast, and which extends into neighboring waters (Lebanon and Cyprus). This study indicates that reserves of 16 trillion cubic feet of gas may exist in the field. And third, there are the results of the seismic survey conducted in favor of the Lebanese government. There are additional problems that must be mentioned as well. For instance, Cyprus's attempt to draw the median line in the sea between its waters and those of Lebanon and Syria faced Turkish objection, under the pretext that Turkey's territorial waters extend to those areas, as a result of the Turkish occupation of northern Cyprus. It is also worth mentioning here that both Syria and Cyprus offered several maritime blocks for investment in 2007; however, the reaction of the international companies at the time was lackluster. There are plans underway by both countries to re-offer maritime blocks for investment in the coming months. *. Mr. Khadduri is an energy expert
